AGENDA
ITEM
11 BAla AGENDA STAFF REPORT
CALEXICO
DATE: June 15, 2022
TO: Mayor and City Council
APPROVED BY: Diego Favila, Interim City Manager
PREPARED BY: Sandra L. Fonseca, Interim Finance Director 01 SUBJECT: Resolution of the City Council of the City of
Calexico Reconfirming the City's Investment Policy
Recommendation:
Adopt Resolution of the City Council of the City of Calexico Reconfirming the City's Investment Policy.
Background:
California Government Code requires an annual review of the City's Investment Policy by the City Council. The Investment Policy was last reviewed by City Council on June 23, 2021.
Discussion & Analysis:
No change in policy is recommended at this time in the City's Investment Policy.
An update in the investment policy is warranted if there is a change in State statute or a change in City objectives.
Fiscal Impact:
No change in policy or investment practice is anticipated at this time AGENDA
The City currently invests its surplus operating funds in the State of California ITEM Treasurer's Local Agency Investment Fund to meet the City's objectives for safety, liquidity and yield.
Coordinated With:
None.
Attachments:
1. Resolution of the City Council of the City of Calexico Reconfirming the City's Investment Policy Including Certain Revisions Thereto.
2. Investment Policy 2022-23.
RESOLUTION NO. 2022-_
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CALEXICO APPROVING • THE CITY'S INVESTMENT POLICY INCLUDING CERTAIN
REVISIONS THERETO
WHEREAS, the Finance Department has completed its annual review of the Investment Policy for the City of Calexico ("'City"); and
WHEREAS, the recommended policy is attached to this resolution as Attachment "A"; and
WHEREAS, this resolution supersedes all the resolutions adopted on or before June 15, 2022, as Resolution No. 2022- by the City Council of the City of Calexico reconfirming the City's Investment Policy;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CALEXICO THAT:
The 2022-23 City of Calexico Investment Policy is hereby reconfirmed and Attached as Attachment "A". There are no revisions to report.
PASSED, ADOPTED and APPROVED this 15'' day of June, 2022, by the City Council of the City of Calexico.
Javier Moreno, Mayor
ATTEST:
Gabriela Garcia, Deputy City Clerk
APPROVED AS TO FORM:
Carlos Campos, City Attorney
SEAL
State of California )
City of Calexico ) SS.
County of Imperial
1, Gabriela T. Garcia, Deputy City Clerk of the City of Calexico do hereby certify that the foregoing Resolution No. 2022- was duly adopted by the Calexico City Council at a regular meeting thereof held on the 15" day of June 2022, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Gabriela T. Garcia, Deputy City Clerk
ATTACHMENT "A"
FY 2022-23
INVESTMENT POLICY
A-1
CITY OF CALEXICO
INVESTMENT POLICY
FOR
FISCAL YEAR 2022-23
A-2
City of Calexico Investment Policy
FY 2022-23
TABLE OF CONTENTS
1. Introduction 3
11. Scope 3
111. Prudent Person Rule 3
IV. Objectives 4
V. Delegation of Authority 4
VI. Ethics/Conflict of Interest 4
VII. Authorized Financial Dealers and Institutions
VIII. Authorized and Suitable Investments
IX. Investment Pools/Mutual Funds
X. Collateralization
XI. Safekeeping and Custody
XII. Diversification
XIII. Maximum Maturities
XIV. Internal Control
XV. Performance Standards
XVI. Reporting
XVII. Investment Policy Adoption
XVIII. Guidelines
Glossary
A-2
CITY OF CALEXICO INVESTMENT POLICY
For Fiscal Year 2022-23
I. INTRODUCTION
Authority to manage the City of Calexico's investment program is derived from Chapter
2.14 of the City's Municipal Code. Among the specific responsibilities vested with the Finance Director/City Treasurer are: responsibility for the investment program; management of all transactions undertaken for investments; oversight of a system of internal controls to regulate the activities of all others who may be delegated to assist or participate in the program from time-to-time. The Finance Director/City Treasurer shall establish investment policy procedures for the investment program consistent with this policy. The Finance Director/City Treasurer is responsible for the investment of bond proceeds whether held by the City or with fiscal agents. All of the aforementioned activities are subject to the City Manager's oversight and approval in his/her role as the City's chief executive.
It is the policy of the City of Calexico to invest public funds ina manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds.
Il. SCOPE
This investment policy applies to all financial assets of the City. These funds are accounted for inthe City's Comprehensive Annual Financial Report (CAFR) and include:
General Fund
Special Revenue Funds
Debt Service Funds
Capital Project Funds
Enterprise Funds
Fiduciary Funds
This investment policy does not apply to Bond Proceeds or Deferred Compensation Funds if they fall under specific language in California Government Code Section 5922(d).
This code section authorizes bond, certificates of participation notes and other debt issue proceeds to be invested in accordance with the related offering documentation. Likewise, Deferred Compensation Plans are covered elsewhere under California Government Code (CGC).
A-3
I. PRUDENT PERSON RULE
Investments shall be made with judgment and care under circumstances then in effect which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.
The standard of "Prudence" to be used by investment officials shall be the "prudent person" and/or "prudent investor" standard and shall be applied inthe context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely manner and appropriate action is taken to control adverse developments.
IV. OBJECTIVES
There are three major objectives in the City's investment policy. They are:
1. Safety: Safety of principal is the foremost objective of the investment program. The investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities offering independence of returns and financial institutions.
2. Liquidity: The City's investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated.
3. Yield on Investments: The City's investment portfolio shall be designed with the objective of attaining a benchmark rate of return throughout budgetary and economic cycles, commensurate with the City's investment risk constraints and the cash flow characteristics of the portfolio.
DELEGATION OF AUTHORITY
Authority from state law to manage the City's investment program is derived from CGC Section 53646. Management responsibility for the investment program is hereby delegated to the Treasurer who shall be responsible for all transactions undertaken and shall establish a system of controls to regulate the activities of subordinate officials, and their procedures inthe absence of the Treasurer.
The City Treasurer shall establish written investment policies and procedures for the operation of the investment program consistent with this policy. The procedures should include reference to: safekeeping, Public Securities Agreements, repurchase agreements, wire transfer agreements, banking service contracts and collateral/depository agreements.
Such procedures shall include explicit delegation of authority to persons responsible for investment transactions. No person may engage in an investment transaction except as provided under the terms of this policy and the procedures established by the City A-4
VI. ETHICS AND CONFLICT OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which would impair their ability to make impartial investment decisions. Employees and investment officials shall disclose to the City Manager any material financial interests in financial institutions that conduct business within their jurisdiction, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the City. All the City's employees who participate in the investment process are required by the Fair Political Practices Commission (FPPC) to complete and file a Form 700 annually.
VII. AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The Finance Director/City Treasurer will maintain a list of financial institutions authorized to provide investment services. In addition, a list will also be maintained for approval of security broker/dealers selected by Finance Director/City Treasurer and approved by the City Council for their credit worthiness that are authorized to provide investment services in the State of California. These may include "primary" dealers or regional dealers that qualify under the Securities and Exchange Commission Rule 15C3-1 (uniform net capital rule). No public deposit shall be made except in a qualified public depository as established by state laws. All financial institutions and broker/dealers who desire to become qualified bidders for investment transactions must supply the Finance Director/City Treasurer with the following: audited financial statements, proof of National Association of Security Dealers certification, trading resolution, proof of state registration, completed broker/dealer questionnaire, certification of having read City's investment policy and depository contracts.
An annual review of financial condition and registration of qualified bidders will be conducted by the Finance Director/City Treasurer. A current audited financial statement is required to be on file for each financial institution and broker/dealer inwhich the City invests.
VIlI. AUTHORIZED AND SUITABLE INVESTMENTS
The City is empowered by statute to invest in securities and instruments as described in Figure 1.
Under Provisions of CGC Section 53601.6 the City shall not invest any funds covered by this Investment Policy in inverse floaters, range notes, interest-only strips derived from mortgage pools or any investment that may result in a zero interest accrual if held to maturity. Ălso, the City shall not invest in Reverse Repurchased Agreements and Mortgage Pass-Through Securities.
A-5
IX. INVESTMENT POOLS/MUTUAL FUNDS
A thorough investigation of the pool/funds is required prior to investing, and on a continual basis. There shall be a questionnaire developed which will answer the following general questions:
• A description of eligible investment securities, and a written statement of investment policy and objectives.
• A description of interest calculations and how it is distributed, and how gains and losses are treated.
• A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited. • A description of who may invest inthe program, how often, and what size deposit and withdrawal are allowed.
• A schedule for receiving statements and portfolio listings. • Are reserves, retained earnings, etc. utilized by the pool/fund? A fee schedule, and when and how is it assessed.
• Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds? X. COLLATERALIZATION
Collateralization will be required on two types of investments: certificates of deposit and sweep checking accounts. Inorder to anticipate market changes and provide a level of security for all funds, the collateralization level will be 110% of market value of principal and accrued interest.
The City chooses to limit collateral to the following: certificates of deposit and sweep checking accounts held by an independent third party with whom the entity has a current custodial agreement. A clearly marked evidence of ownership (safekeeping receipt) must be supplied to the entity and retained. The right of collateral substitution is granted.
XI. SAFEKEEPING AND CUSTODY
All security transactions entered into by the City shall be conducted on a delivery- versus payment (DVP) basis. Securities will be held by a third party custodian designated by the Treasurer and evidenced by safekeeping receipts.
XII. DIVERSIFICATION
The City will diversify its investments by security type and institution. With the exception of U.S. Treasury securities and authorized pools, no more than 50 percent of the City's total investment portfolio will be invested in a single security type or with a single financial institution. See Figure 1 and the accompanying notes for further information.
XIII. MAXIMUM MATURITIES
A-6
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow and/or authorized by the City Council, the City will not directly invest in securities maturing more than five years from the date of purchase.
CD maturities will normally not exceed two years. U.S. Government or Agency securities will not exceed five years. At least 50 percent of the idle funds will be placed in investments which can be liquidated for at least face value in the event of an emergency.
The City uses a combination of LAIF and sweep accounts for its idle funds to ensure this requirement is met.
XIV. INTERNAL CONTROL
The Treasurer shall establish an annual process of independent review by an external auditor.
This review will provide internal control by assuring compliance with policies and procedures.
XV. PERFORMANCE STANDARDS
The investment portfolio shall be designed with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs.
XVI. REPORTING
In accordance with CGC Section 53646 (8(1), the City Treasurer shall submit to each member of the City Council a quarterly investment report. The report shall include a complete description of the portfolio, the type of investments, the issuers, maturity dates, par values and the current market values of each component of the portfolio, including funds managed for the City of Calexico by third party contract managers. The report will also include the source of the portfolio valuation. As specified in CGC 53646 (e), if all funds are placed in LAIF, FDIC insured accounts and/or in a county investment pool, the foregoing report elements may be replaced by copies of the latest statements from such institutions. The report must also include a certification that (1) all investment actions executed since the last report have been made in full compliance with the investment policy, and, (2) the City of Calexico will meet its expenditure obligations for the next six months.
A staff investment committee consisting of the City Manager and the Treasurer will convene at least once a year to review the investment program. Such review shall examine both policy and administrative procedures in the program for possible revision. This meeting will normally occur in May.
3. Strategy Review: The Staff investment committee will review interest rate trends and resultant desirable investment maturity goals consistent with the City's needs for safety and liquidity in its investment program.
XVII. INVESTMENT POLICY ADOPTION
A-7
The City's investment policy shall be adopted by resolution of the City's legislative authority.
Per Government code, the policy shall be reviewed annually by the City Council and any modifications made thereto must be approved by the City Council.
XVIll. GUIDELINES
Guidelines are established to direct and control activities in such a manner that previously established goals are achieved.
Investment Transactions: Every investment transaction must be authorized, documented and reviewed by the City's Treasurer.
Pooled Cash: Whenever practical, City cash should be consolidated into one bank account and invested on a pooled concept basis. Interest earnings may be allocated to fund cash and investment balances.
Competitive Bids: Purchase and sale of securities should be made on the basis of competitive offers and bids when practical.
Cash Forecast: The cash flow for the City should be analyzed with the receipt of revenues and maturity of investments scheduled so that adequate cash will be available to meet disbursement requirements.
Investment Limitations: Security purchases and holdings shall be maintained within statutory limits imposed by the Investment Policy and CGC. Any investments not listed are not subject to percentage limitations.
Bankers' Acceptance Commercial Paper Negotiable Cert. Of Dep. Medium-Term Corp. Notes:
40% Code Section 53601 (f)
25% Code Section 53601 (g)
30% Code Section 53601 (h)
30% Code Section 53601 (g)
Liquidity: The marketability (salability) of a security should be considered at the time of purchase as the security may have to be sold at a later date to meet unanticipated cash demand
Long-Term Maturities: As a general rule, long-term maturities should not represent a significant percentage of the total portfolio, as the principal risk involved can outweigh the potential for higher earnings.
Authorized Broker/Dealers: Execute investment transactions with previously approved broker/dealers who have certified compliance with the City's investment policy.
Diversification: The portfolio should consist of a mix of various types of securities, issuers A-8
and maturities.
• Evaluation of Certificates of Deposit: The following items will govern the valuation: Time Certificates of Deposit (TCD) shall be evaluated interms of FDIC or FSLIC coverage.
For deposits in excess of the insured maximum of $250,000. • $250,000.00, approved collateral at the amounts stated in Section X of this policy. {CGC Section 53652 and/or 53651 {m).
Negotiable Certificates of Deposit (NCO) shall be evaluated interms of the credit worthiness of the issuer, as these deposits are uninsured and uncollateralized notes.
A-9
GLOSSARY
AGENCIES: Federal agency securities and/or Government-sponsored enterprises. ASKED:
The price at which securities are offered.
BANKERS' ACCEPTANCE (BA): A draft or bill or exchange accepted bylaw bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.
BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of he portfolio's investments.
BID: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer.
BROKER: A broker brings buyers and sellers together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit with a specific maturity evidenced by a Certificate. Large-denomination CD's are typically negotiable.
COLLATERAL: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits
Of public monies.
COMPREHENSIVE ANNUAL FINANCIAL REPORT (CAFR): The official annual report for the City. It includes five combined statements for each individual fond and account group prepared in conformity with OMP. It also includes supporting schedules necessary to demonstrate compliance with finance- related legal and contractual provisions, extensive introductory material, and a detailed statistical section.
COUPON: (a) The annual rate of interest that a bond's issuer promises to pay the bondholder on the bond's face value. (b) A certificate attached to a bond evidencing interest due on a payment date.
DEALER: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.
DEBENTURE: A bond secured only by the general credit of the issuer.
A-10
DELIVERY VERSUS PAYMENT: There are two methods of delivery of securities: delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.
DERIVATIVES: (1) Financial instruments whose return profile is linked to, or derived from, the movement of one or more underlying index or security, and may include a leveragin actor, or (2) financial contracts based upon notional amounts whose value is derived fron an underlying index or security (interest rates, foreign exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price of a security and its maturity when quoted at lower than face value. A security selling below original offering price sho1 tly after sale also is considered to be at a discount.
DISCOUNT SECURITIES: Non-interest bearing money market instruments that are issued a discount a11d redeemed at maturity for full face value, e.g., U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the Federal government set up to supply credit to various classes of institutions and individuals, e.g., S&L's, small business firms, students, farmers, farm cooperatives, and exporters.
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): A federal agency that Insures bank deposits, currently up to $100,000 per deposit.
FEDERAL FUNDS RATE: The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open-market operations.
FEDERAL HOME LOAN BANKS (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank.
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder-owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.
FEDERAL OPEN MARKET COMMITTEE (FOMC): Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The A-11
President of the New York Federal Reserve Bank is a permanent member, while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of the United States created by Congress and consisting of a seven member Board of Governors in Washington, D.C., 12 regional banks and about 5,700 commercial banks that are members of the system.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA or Ginnie Mae):
Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions. Security holder is protected by full faith and credit of the U.S. Government.
Ginnie Mae securities are backed by the FHA, VA or FMHA mortgages. The term "pass- throughs" is often used to describe Ginnie Mae's.
LIQUIDITY: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP): The aggregate of all funds from political subdivisions that arc placed in the custody of the State Treasurer for investment and reinvestment.
MARKET VALUE: The price at which a security is trading and could presumably to be purchased or sold.
MASTER REPURCHASE AGREEMENT: A written contract covering all future transactions between the parties to repurchase-reverse repurchase agreements that establish each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower.
MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.
MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded.
OFFER: The price asked by a: seller of securities. {When you are buying securities, you ask for an offer.) See Asked and Bid.
OPEN MARKET OPERATIONS; Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank as directed by the FOMC in order to influence the volume of money and credit in the economy. Purchases inject reserves into the bank system and stimulate growth of money and credit; sales have the opposite effect. Open market operations are the Federal Reserve's most important and most flexible monetary policy tool.
PORTFOLIO: Collection of securities held by an investor.
A-12
PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms.
PRUDENT PERSON RULE: An investment standard. In some states the law requires that a fiduciary, such as a trustee, may invest money only in a list of securities selected by tile custody state---the so- called legal list. In other states the trustee may invest in a security if it is one which would be bought by a prudent person of discretion and intelligence who is seeking a reasonable income and preservation of capital.
QUALIFIED PUBLIC DEPOSITORIES: A financial institution which does not claim exemption from the payment of any sales or compensating use of ad valorem taxes under the laws of this state, which has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability and which has been approved by the Public Deposit Protection Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity on a bond current income return.
REPURCHASE AGREEMENT (REPO): A holder of securities sells these securities to an investor with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer" in effect lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use REPOs extensively to finance their positions. Exception: When the Fed is said to be doing REPOs, it is lending money that is, increasing bank reserves.
SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.
SECONDARY MARKET: A market mode for the purchase and sale of outstanding issues following the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency created by Congress to protect investors in securities transactions by administering securities legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by Government Sponsored Enterprises (FHLMA, FNMA, SLMA, etc.) and Corporations, which have imbedded options (e.g., call features, step-up coupons, floating rate coupons, and derivative-based returns) into their debt structure. Their market performance is impacted by the fluctuation of interest rates, the volatility of the imbedded options and shifts in the shape of the yield curve.
TREASURY "BILLS: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.
A-13
TREASURY BONDS: Long-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities of more than 10 years.
TREASURY NOTES: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and Exchange Commission requirement that member firms as well as non-member broker-dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.
YIELD: The rate of annual income return on an investment, expressed as a percentage:
(a) INCOME YIELD is obtained by dividing the current dollar income by the Current Market Price for the Security.
(b) NET YIELD or YIELD TO MATURITY is the current income yield minus any premium allowed par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.
A-14
FIGURE 1
ALLOWABLE INVESTMENT INSTRUMENTS PER STATE GOVERNMENT
CODE (AS OF JANUARY 1, 2022)^ APPLICABLE TO ALL LOCAL AGENCIES®
MAXIMUM
MINIMUM GOY T
UM SPECIFIED
QUALITY CODE
ITY % OF
REQUIREMENTS SECTIONS
PORTFOLIO
Local Agency Bonds 5 years None None 53601(a)
U.S. Treasury Obligations 5 years None None 53601(b)
state Obligations- 53601(c)
5 years None
CA And Others 53601(d)
CA Local Agency Obligations 5 years None Non 53601(e)
U.S Agency Obligations 5 years None None 53601(f)
Bankers' Acceptances 180 days 40%* None 53601(g)
Commercial Paper-Non-Pooled Funds 270 days 25% of the Highest letter and (under $100,000,000 of investments) agency's money" number rating by an 53601(h)(2)(c) or less NRSRO"
Highest letter and
ommercial Paper-Non-Pooled Func 270 days 40% of the 53601(h)(2)(c) nin. $100,000,000 of investments or less agency's money® number rating by an NRSRO"
Commercial Paper- 270 days 40% of the Highest letter and Pooled Funds or less agency's money® number rating by an 53635(a)(1) NRSRO"
Negotiable Certificates of Deposit 5 years 30%' None 53601(i) Non-negotiable Certificates of Deposit 5 years None None 53630 et seq.
Placement Service 5 years 50%* None 53601.8 and 53635.8 Depositi
acement Servic 5 years 50%* 53601.8 and 53635.8
ertificates of Deposi
Repurchase Agreements 1 year None None 53601(j)
Securite ending remements and 92 days! 20% of the base NoneM 53601(J) value of the portfolio
Medium-Term Notes 5 years "A" rating category or 53601(k) or less 30%
its equivalent or better
Markat Nuts rundoney N/A 20% Multiple®a 53601(i) and
53601.6(b)
Collateralized Bank Deposits® 5 years None 53630 et seq.
None and 53601(n)
ortgage Pass-Through a 5 years 20% "AA" rating category or 53601(o) set-Backed Securit or less its equivalent or better
County Pooled N/A None 27133
Investment Funds None
Joint Powers Authority Pool N/A None Multiples 53601(p) Local Agency Investment Fund (LAIF) N/A None None 16429.1 Voluntary Investment Program Fund™ N/A None 16340
Supranational Obligations" 5 years 30% "AA" rating category or 53601(q) or less its equivalent or better
5 years 53601(г), 53635(c)
Public Bank Obligations None None
and 57603
LOCAL AGENCY INVESTMENT GUIDELINES